Riyadh, Kingdom of Saudi Arabia, 29 April 2024 – The Securities Commission Malaysia (SC) on Monday signed a Memorandum of Understanding (MOU) with the Islamic Development Bank (IsDB) Group, paving the way for greater cooperation in Islamic capital market (ICM) and broadening the reach of Islamic fintech and social finance, particularly waqf.
The Honourable Prime Minister of Malaysia, Dato’ Seri Anwar Ibrahim and IsDB President and Chairman, His Excellency Dr. Muhammad Al Jasser witnessed the signing of the landmark MOU, the first-of-its-kind between the Malaysian capital market regulator and the premier multilateral development bank of the Global South.
The SC Chairman, Dato’ Seri Dr. Awang Adek Hussin and IsDB Vice President, Finance and Chief Financial Officer, Dr Zamir Iqbal signed the MOU on the sidelines of the IsDB Annual General Meeting 2024 in Riyadh.
Dato’ Seri Anwar and H.E. Dr. Muhammad Al Jasser had last year agreed that regulators, authorities and businesses in Malaysia to work closely with IsDB to explore new areas of collaboration. These include developing and piloting innovative Islamic finance products, promoting the halal industry, and supporting micro and small enterprises (MSMEs).
Under the MOU signed this morning, both the SC and IsDB will collaborate in several key areas. These include facilitating innovation in Islamic fintech, promoting development of Islamic social finance, and encouraging inflow of foreign investment into private markets, among others.
It also aims to increase capacity building, knowledge sharing and joint technical projects in key interest areas related to ICM, which can also be capitalised by both institutions for the benefit of other IsDB member countries.
Dato’ Seri Dr. Awang Adek said the synergistic collaboration marked an important milestone for the SC and IsDB.
“We now intend to broaden and deepen Islamic fintech state of play via scalability and new markets as well as amplify opportunities through social finance including development of waqf assets, by using our respective capital markets and financial development expertise,” he said.
“Through greater collaboration, both parties can also develop and scale up the MSMEs and private markets in support of our aspirations,” he added.
Dr. Muhammad Al Jasser said, “Under this MOU, the Securities Commission and IsDB will collaborate to enhance Islamic fintech, social finance, and attract foreign investment in private markets. This will enhance the Islamic capital markets not only in Malaysia but also across IsDB Member Countries. This partnership prioritizes support for MSMEs and private markets, which are crucial for economic empowerment.”
Dato’ Seri Dr. Awang Adek added that this MOU is also in line with the key strategic initiatives for the Malaysian ICM under the Capital Market Master Plan 3 (2021 – 2025), including expanding the reach of ICM to the broader stakeholders of the economy and embracing collaboration and innovation for growth.
To that end, the SC together with its affiliate, Capital Markets Malaysia recently engaged with various stakeholders in Abu Dhabi, Dubai and Riyadh. This includes lending Malaysia’s voice to reinforcing ICM’s impact and enhancing Malaysia’s global thought leadership.
In several panel sessions in the region, the SC’s Executive Director of Islamic Capital Market, Sharifatul Hanizah Said Ali spoke about how ICM can be harnessed to structure innovative financing instruments to further advance social impact investing, sukuk issuances and Islamic asset management.
Going forward, the SC is working on introducing a social exchange in Malaysia later this year to further promote inclusive growth and strengthen the sustainable finance offerings.
The introduction of the social exchange will further cement the ICM position in Malaysia, already widely regarded as an ICM global thought leader and pioneer in Islamic sustainable development.
The Malaysian ICM grew 4.5% to RM2.4 trillion in 2023 while sukuk outstanding rose by 7.4% and Shariah-compliant equities by 1.5%.
Malaysia also remains the global leader in ICM, particularly in sukuk outstanding as well as Islamic fund management, securing top rankings in global indices including Islamic Fintech Index, the Global Islamic Economy Indicator and the global Islamic Finance Development Indicator for the 10th consecutive year.
